Taking a look at the direction of the price of copper over the past couple of weeks, the metal seems to be signaling an outlook contrary to the recent influx of positive news about the global economy, or at least it’s showing no particular enthusiasm.
Taking a look at the direction of the price of copper over the past couple of weeks, the metal seems to be signaling an outlook contrary to the recent influx of positive news about the global economy, or at least it’s showing no particular enthusiasm. After a brief run toward $4 per pound on the New York Mercantile Exchange’s Comex on Feb. 9, the price of copper has settled back into a range around $3.80 to $3.83.
Earlier this week, when the latest round of bailout deals for Greece were announced by the European central bank, the price of copper rose along with other metals and crude oil on apparent optimism about global growth prospects. In copper’s case, this was combined with signals from China, the metal’s biggest buyer, that it may loosen bank requirements to support more growth, along with concerns about production during a shutdown of the world’s third-largest copper mine in Chile following the death of a worker. Over the following days, though, the price turned downward again, despite the Dow Jones Industrial Average pushing toward and temporarily breaching the 13,000-point mark.
The International Copper Study Group (ICSG), Lisbon, Portugal, meanwhile, put out a bulletin Feb. 23 showing copper production falling short of demand in November 2011 by 119,000 metric tonnes, due to China’s strengthening net imports, and estimated a shortfall of 382,000 tonnes for the first 11 months of 2011. Overall global copper consumption increased 2.7% in that period compared to the same period in 2010, and rose a significant 12% in October and November due to a 38% increase in “apparent usage” by China and a 59% increase in China’s net imports. Copper production, meanwhile, remained essentially flat (up 0.1%), and well below estimated production capacity, the ICSG report said.
In an earnings call transcript published this week for Encore Wire Corp., McKinney, Texas, at www.seekingalpha.com, Daniel Jones, Encore Wire’s president and CEO, said the company had strong quarterly earnings in a turbulent economy despite the “severe recession currently taking place in the construction industry.”
While Jones also said in the call that business conditions were mixed in different regions across the United States, overall he had a positive outlook. He said business conditions in the Pacific Northwest were good, that “West Coast California, Southern Cal, Northern Cal are okay,” and that the Carolinas, Georgia and Florida are “pretty good.” “The Northeast is good, and in Texas I don’t know that we saw as big a dip as anyone else in construction activity, but we seem to be a little insulated from the bottoms,” he added. “Texas, Oklahoma, New Mexico are still going along pretty well.
“But just in general the feeling is, we are a lot busier. Activity level in the sales office is up, but that’s a combination of we are requiring a little bit more information in trying to get a little bit quicker in the process. But overall there are some pretty nice projects out there; it just takes a little harder work to win those.”
Houston Wire & Cable Co. (HWC), Houston, has expanded its Denver electrical wire and cable distribution center, more than doubling the size of the facility to better accommodate the needs of customers in its Western and Mountain regions. HWC can triple the size of its inventory at this location and add multiple cutting lines to increase productivity and improve lead time. The new Denver facility will also be equipped with full cable management capabilities to better handle larger projects in the area, as well as bar coding for enhanced inventory management.